1 INDEPENDENT AUDITOR S REPORT Farmers Blvd. St. Albans, NY Tel (718) Fax (718) To the Board of Directors The Association for Neighborhood & Housing Development, Inc. New York, New York Report on the Financial Statements I have audited the accompanying statement of financial position of The Association for Neighborhood & Housing Development, Inc. (the Organization ) as of June 30, 2014 and the related statement of activities and change in net assets, functional expenses and cash flows for the year then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Association for Neighborhood & Housing Development, Inc. as of June 30, 2014, and the results of its operations and its cash flows for the year ended in conformity with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information I have previously audited The Association for Neighborhood & Housing Development, Inc. s 2013 financial statements, and expressed an unmodified opinion on those financial statements in my report dated August 29, In my opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2013, is consistent, in all material respects, with the audited financial statements from which it has been derived. September 5, 2014 American Institute of s Member New York State Society of s
2 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR S REPORT JUNE 30, 2014 AND 2013
3 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. -CONTENTS- Independent Auditor s Report Page 1 Statements of Financial Position Page 2 Statements of Activities and Change in Net Assets Page 3 Statements of Functional Expenses Pages 4-5 Statements of Cash Flows Page 6 Notes to Financial Statements Pages 7-9
4 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. Page 2 STATEMENTS OF FINANCIAL POSITION AS OF JUNE 30, 2014 AND 2013 ASSETS Current Assets Cash $ 200,661 $ 582,830 Investments 1,054,387 1,026,062 Accounts receivable 272,931 57,458 Grants receivable 335, ,000 Prepaid expenses 1,175 1,397 Total Current Assets 1,864,154 1,872,747 Other Assets Security deposit 13,200 13,200 Fixed Assets Equipment 87,707 88,822 Less: Accumulated depreciation (81,317) (74,543) Net Fixed Assets 6,390 14,279 Total Assets $ 1,883,744 $ 1,900,226 LIABILITIES AND NET ASSETS Current Liabilities Accounts payable $ 113,893 $ 357,230 Accrued payroll and related liabilities 3,245 2,738 Total Current Liabilities 117, ,968 Net Assets Unrestricted: Undesignated 157, ,837 Board designated 560, ,282 Temporarily restricted 1,048, ,139 Total Net Assets 1,766,606 1,540,258 Total Liabilities and Net Assets $ 1,883,744 $ 1,900,226 The accompanying notes are an integral part of this statement.
5 Page 3 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED JUNE 30, 2014 WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED JUNE 30, Temporarily Unrestricted Restricted Total Total Support and Revenue Foundation and corporate grants $ 300,000 $ 1,477,000 $ 1,777,000 $ 1,650,500 Government grant/contract 100, , ,000 Contributions , , ,010 Administrative fees income 288, , ,552 Membership dues 35,000 35,000 37,500 Training Institute 6,155 4,920 11,075 10,408 Annual conference income 127, , ,035 Miscellaneous income Unrealized gain/(loss) on investments 9,742 9,742 (22,848) Dividend income 19,231 19,231 15,742 Interest income Total Support and Revenue 887,068 1,668,380 2,555,448 2,619,528 Net assets released from restrictions 1,323,965 (1,323,965) Total Support and Revenue 2,211, ,415 2,555,448 2,619,528 Expenses Program Services Advocacy and Policy 327, , ,481 Training and Technical Assistance 885, ,851 1,080,977 Neighborhood Opportunities Fund 633, , ,806 Fellowship Program 145, , ,017 Total Program Services 1,992,729 1,992,729 2,159,281 Supporting Services Management and general 231, , ,042 Fund raising 105, , ,521 Total Supporting Services 336, , ,563 Total Expenses 2,329,100 2,329,100 2,422,844 Change in net assets (118,067) 344, , ,684 Net assets at beginning of year 836, ,139 1,540,258 1,343,574 Net assets at end of year $ 718,052 $ 1,048,554 $ 1,766,606 $ 1,540,258 The accompanying notes are an integral part of this statement.
6 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. Page 4 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30, 2014 WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED JUNE 30, 2013 PROGRAM SERVICES Training (Page 5) Advocacy and Neighborhood Total and Technical Opportunities Fellowship Program Policy Assistance Fund Program Services Salaries $ 189,124 $ 491,518 $ - $ - $ 680,642 Payroll taxes & fringe benefits 42,595 78, ,285 Professional fees 40,223 69,717 28, ,971 Advertising & public relations Travel, conferences & related expenses 2, ,260 Office supplies & expenses 2,621 5, ,871 Board & member expenses 2,472 9, ,149 Insurance 530 1,201 1,731 Rent 20,854 47,330 68,184 Telephone & online services 1,468 3,329 4,797 Printing & duplicating 15, ,437 Utilities 1,854 4,208 6,062 Equipment maintenance & rental 2,566 2,031 4,597 Miscellaneous 1,117 (1,116) Staff training 1,790 2,237 4,027 Dues Program grants & expenses 153, , , ,082 Annual conference 10,000 10,000 Training institute Interest expense Depreciation 2,724 6,183 8,907 Total $ 327,997 $ 885,851 $ 633,153 $ 145,728 $ 1,992,729
7 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. Page 5 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30, 2014 WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED JUNE 30, 2013 (Page 4) Total SUPPORTING SERVICES Management Total Program and Fundraising Supporting Services General Expenses Services Total Total Salaries $ 680,642 $ 42,928 $ 72,000 $ 114,928 $ 795,570 $ 933,379 Payroll taxes & fringe benefits 121,285 12,896 19,039 31, , ,105 Professional fees 137,971 8,346 1,339 9, , ,064 Advertising & public relations Travel, conferences & related expenses 2, ,382 2,987 Office supplies & expenses 8,871 2, ,563 12,434 12,698 Board & member expenses 13, ,491 11,560 Insurance 1,731 1, ,872 3,603 3,772 Rent 68,184 21,992 8,799 30,791 98,975 92,037 Telephone & online services 4,797 1, ,108 6,905 6,537 Printing & duplicating 16, ,163 21,571 Utilities 6,062 1, ,737 8,799 8,800 Equipment maintenance & rental 4,597 (729) 378 (351) 4,246 4,028 Miscellaneous 477 3,017 3,017 3,494 3,903 Staff training 4, , Dues 32,250 32,250 32,250 56,075 Program grants & expenses 903, , ,194 Annual conference 10,000 97,935 97, ,935 68,516 Training institute 476 Interest expense Depreciation 8,907 2,874 1,149 4,023 12,930 13,020 Total $ 1,992,729 $ 231,153 $ 105,218 $ 336,371 $ 2,329,100 $ 2,422,844 The accompanying notes are an integral part of these statements.
8 Page 6 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2014 AND Cash Flows From Operating Activities Change in net assets $ 226,348 $ 196,684 Adjustments to reconcile net loss to net cash (used in)/provided by operating activities Depreciation 12,930 13,020 (Increase)/decrease in accounts receivable (215,473) 39,367 (Increase)/decrease in grant receivable (130,000) 3,333 Decrease in prepaid expenses (decrease)/increase in accounts payable (243,337) 177,964 Increase in accrued payroll and related liabilities Total adjustments (575,151) 235,343 Net cash (used in)/provided by operating activities (348,803) 432,027 Cash Flows From Investing Activities Purchase of equipment (5,041) (3,772) Depletion of fixed assets 6,156 2,130 Depreciation on depleted fixed assets (6,156) (2,130) Net earnings on investments (28,325) 87,627 Net cash (used in)/provided by in investing activities (33,366) 83,855 Net (decrease)/increase in cash (382,169) 515,882 Cash balance of beginning of year 582,830 66,948 Cash balance at end of year $ 200,661 $ 582,830 Supplemental Disclosure Of Cash Flow Information Cash paid for interest $ 53 $ 160 The accompanying notes are an integral part of this statement.
9 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. Page 7 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 Note 1 ORGANIZATION AND SIGNIFICANT ACOUNTING POLICIES The Association for Neighborhood & Housing Development, Inc. ( ANHD ) was incorporated under the not-forprofit Corporation Law of the State of New York. ANHD is a membership organization of nonprofit neighborhood housing groups whose mission is to ensure flourishing neighborhoods and decent, affordable housing for all New Yorkers by supporting the programs and advancing priorities of member organizations engaged in community development and organizing in low and moderate income neighborhoods throughout the City. A summary of significant accounting policies of Beulah are as follows. Basis of Accounting The accompanying financial statements were prepared on the accrual basis of accounting. Capitalization and depreciation Fixed Assets are recorded at cost, and are capitalized and depreciated over their estimated service lives using the straight-line method of depreciation. The estimated service life of the assets for depreciation purposes may be different from their actual economic useful lives. Fixed Assets purchased with government contracts are expensed in the year purchased. Income Taxes ANHD is exempt from federal income taxes under Section 501(c) (3) of the Internal Revenue Code. ANHD has determined that there are no material uncertain tax positions that require recognition or disclosure in the financial statements. Periods ending June 30, 2011 and subsequent remain subject to examination by applicable taxing authorities. Contributions Contributions are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions. Support that is restricted by the donor is reported as an increase in temporarily or permanently restricted net assets and then reclassified to unrestricted net assets when the restriction expires. Restricted contributions received and expensed in the same fiscal year are reflected as unrestricted revenues. Financial Statements ANHD s financial statements adhere to the established standards for external financial statements provided by not-for-profit organizations which require that resources be classified for accounting and reporting purposes into three classes of net assets permanently restricted, temporarily restricted and unrestricted. All other net assets, including board-designated or appropriated amounts, are reported as part of the unrestricted class. The financial statements include certain prior-year summarized comparative financial information in total but not by asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the organization s financial statements for the year ended June 30, 2013, from which the summarized information was derived. Functional Expense ANHD allocates its expenses on a functional basis among its various programs. Expenses that can be identified with a specific program are charged directly to the particular program according to their natural expense classification. Subsequent events Subsequent events have been evaluated through September 5, 2014, which is the date the financial statements were available to be issued.
10 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. Page 8 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 Note 1 ORGANIZATION AND SIGNIFICANT ACOUNTING POLICIES (continued) Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Note 2 CASH AND INVESTMENTS Financial instruments which potentially subject ANHD to concentrations of credit risk consist principally of cash and cash equivalents, and investments. ANHD maintains its cash in bank deposit accounts which at times may exceed federally insured limits. ANHD has not experienced any losses in such accounts. ANHD believes it is not exposed to any significant credit risk on cash. For financial statement purposes, ANHD considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. Investments consist of cash, cash equivalents and mutual funds, certificate of deposits, and are carried at fair market value. Fair market values as of June 30, 2014 and 2013 are summarized as follows: Apple Bank, Astoria Savings and Ridgewood Bank Certificate of Deposits $ -0- $ 152,549 Franklin Templeton Investments US Government Securities Fund ,539 The Vanguard Group prime money market 80, ,297 Merrill Lynch cash 209, Merrill Lynch mutual funds 765, Short-Intermediate US Government Securities Fund ,677 Total $1,054,387 $1,026,062 Note 3 OPERATING LEASES ANHD has a rental lease agreement for its office space which expires December 31, Annual lease payments for the remaining years are as follows: Year Ending June 30, 2015 $ 119, , , , ,164 Thereafter 865,729 Total $ 1,496,849 ANHD has an operating lease for an office copier. The lease agreement expires November The remaining lease payments are as follows, for the year ending June 30, 2014 $1,205.
11 THE ASSOCIATION FOR NEIGHBORHOOD & HOUSING DEVELOPMENT, INC. Page 9 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014 Note 4 TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the following purposes: Advocacy and policy $ 217,166 $ 48,750 Training and technical assistance 580, ,983 INCO NEXT 245, ,000 Office equipment 6, Neighborhood Opportunities Fund ,406 Total Temporarily Restricted Net Assets $ 1,048,554 $ 704,139 Board designated funds consists of the following: Operating reserve $ 560,801 $ 646,282 Note 5 RELATED PARTY TRANSACTIONS Dues and contributions expense for 2014 and 2013 include $-0- and $54,500, respectively payable to ANHD, Inc., a not-for-profit social welfare organization as described under Section 501 (c) (4) of the Internal Revenue Code, of which ANHD is currently the sole member. ANHD, Inc. also publishes the ANHD Reader ( Reader ) which is offered by subscription to ANHD s member organizations and the general public. In previous years, the Reader was published and distributed by ANHD. In addition, ANHD receives an administrative fee for providing administrative services to ANHD, Inc. During the year ended June 30, 2014 and 2013, ANHD charged $-0- and $40,400, respectively to ANHD, Inc. for such services. Note 6 ADMINISTRATIVE FEE ANHD has an administrative services agreement with the New York Mortgage Coalition ( NYMC ). NYMC is a coalition formed by certain banks for the purpose of increasing the effectiveness of home ownership and mortgage counseling. The administrative services agreement requires, among other matters, ANHD to provide certain administrative and support services to NYMC. ANHD has earned administrative fees of $288,011 and $546,152 for the years ended June 30, 2014 and 2013, respectively, for providing such services.